Highlights of Conf. Call 2/19/98:
(1) only 2 people had questions - one about recruiting problem and another about impact of Rupee devaluation to SYNT's bottom line (ca. $50 to 60K according to John)
(2) y2k biz at 7% of 1997 revenues will double in 1998; y2k is part of their Intellisourcing biz model. Intellisourcing (applications mgmt plus y2k) 51% of revenues in 1997 up from 39% in 1996 seems to be working; expect it go up in 1998 to 60% or higher.
(3) global delivery model - is effective, US head count 1268, India head count 478 now. Expect 2000 in total in 1998.
Wages for programmers went up more in India than in US. By training new people, cross training in-house, etc. reduced the impact of wage increase. "Lack of qualified people" keeps Bharat Desai "awake at night". Demand far exceeds supply.
(4) Waypointe acquisition (revenue of 10MM in 1997) brought ERP business (SAP, BAAN, ORCL) and top customers, added 900K to their 1997 bottom line. ERP will be a major biz in future under their global delivery model.
(5) y2k margin is high, y2k biz will increase in 1998.
(6) % revenues from Teamsourcing will decrease and switched to Intellisourcing
(6) 62% of revenues from top 5 customers, 75% from top 10 customers (AIG, Dayton Hudson, etc.) This customer list will change in 1998.
(7) Due to fewer billing days in December, they could not book as much. Fewer billing days and expenses in Dec cost them $1MM.
(8) Gross margin 31.8%, Rate of revenue growth qtr to qtr: 1Q 20%, 2Q 28%, 3Q 43%, 4Q 46% for 1997. Billing rate went up from $42.7 to 52.17.
So much for this Q. Enjoy the ride! Ram
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